Top Regulatory Concerns on the US Commercial Waterfront

By Tom Ewing

A top 10 list of regulatory concerns is by no means all-inclusive, but it does bring to light the full weight of the regulatory hammer on the collective domestic commercial waterfront.

“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us...” – Charles Dickens, A Tale of Two Cities, 1859.

Where business regulations are concerned – across all sectors, not just the maritime and port industries – today’s regulatory environment recalls Dickens’ famous reference to the human condition. (Today, however, we might revise: “It was the age of foolishness, it was the age of Twitter.”) With apologies to Mr. Dickens.

Regarding the worst of times, that’s surely an exaggerated phrase, but American businesses continue to operate within a labyrinthine and almost endless thicket of federal regulatory demands, commands, advisories, cross-references, deadlines, chapters, parts, sub-parts, addendums, footnotes, etc. All of this and at the Balkanized state and local levels, as well.

At the same time, and regarding the best of times, the new President and his team are making important moves to reform and revise federal regulations and the regulatory system. The President wants an updated regulatory structure that is less costly, efficient, modern in approach and references, and actually provides real-world benefits.

Numerous maritime issues, of course, are within this review. Maritime businesses are impacted by decisions and directives from multiple cabinet level agencies, from DOT and MARAD to the Department of Homeland Security and its U.S. Coast Guard, the Department of Commerce and NOAA, the Environmental Protection Agency (EPA) and the Department of Energy. This reform process is supposed to result in revisions that align with the concerns and suggestions of the regulated community, as well as the public at large.

Substantive reform is a gigantic task, pitting dragon-slayers against an immense blob, usually inert, but skilled at fighting back, frequently with many unexpected allies. Success requires focus and persistence, for years, not months. Hopefully, the executive branch – regardless of who is in charge – will keep its attention on this critical initiative.

The Top 10 List

This month, we list 10 regulatory issues confronting maritime businesses during the final quarter of 2017 and likely to continue into 2018. The list is developed from close review of federal rulemaking activities, discussions among MN’s editors, maritime web pages and, importantly, interviews with Thomas Allegretti, President and CEO of the American Waterways Operators (AWO) and Edward Kelly, Executive Director, Maritime Association of the Port of New York/New Jersey. The (unprioritized) list looks something like this:

Subchapter M Implementation

Jones Act

Ballast Water Treatment

TWIC

Dredging & Infrastructure

Air Emissions

Anchorages & Safety Zones

Offshore Energy

Local Zoning / Land use

State Regulations

A Closer Look:

Sub-M: The shorthand phrase referencing Subchapter M of the Code of Federal Regulations (CFR) dealing with towing vessels; more specifically, inspection, standards, and safety management. Final rule issued July, 2016. Existing vessels need to meet most requirements by July, 2018. New vessels (keel laid/major conversion after July 20, 2017) must meet all requirements and obtain a certificate of inspection before entering service. Sub M stems from legislation passed in 2004. The maritime community was active during regulatory development. In general, maritime experts are okay with the final rule. However, concerns remain about actually implementing Sub M’s demands. AWO’s Allegretti says the law’s broad scope presents many difficulties, from personnel to equipment to operations. Kelly, with the Maritime Association, said implementation will be expensive and difficult. He said the Big Guys will be okay because they have money and technical know-how. Smaller operators could struggle, cutting corners or, worse, going out of business.

Ballast Water Treatment: Ballast regulations were to go live in 2017. In March, the Coast Guard updated the extension program for vessels not yet able to comply. But, those extensions will be increasingly difficult to obtain, especially since (as this magazine goes to press) five BWTS systems now have Coast Guard approval with a slew of other knowing at the door. Kelly said ballast regulations have been “limping and crawling” ahead for years, but, he added, “they still need balance.” Allegretti remains concerned, noting that federal and state regulations – more than two dozen states regulate ballast water – remain a confusing, Balkanized and costly regulatory patchwork making compliance difficult. AWO wants a legislative fix, urging Congress to pass S. 168/HR 1154, the Commercial Vessel Incidental Discharge Act (CVIDA), in 2017. These bills establish a uniform federal regulatory framework for ballast water and other vessel discharges. AWO calls these bills “the U.S. maritime industry’s highest legislative priority in 2017.”

Jones Act / Coastwise Trade: This issue arose (again) in January. The Customs and Border Patrol (CPB) proposed changes to reverse then-current practices allowing non-US based vessels to transport cargo between US ports, or, put another way, the change would only allow U.S. based vessels to carry this cargo. This proposal stirred up some discussion. In May, CPB backpedaled; writing that based on “substantive comments” received “we conclude that the Agency’s notice of proposed modification and revocation of the various ruling letters relating to the Jones Act should be reconsidered.” That’s where the matter dropped, and that’s where it stands, without further development, one way or the other. But is the topic still active inside the secret walls? No answer on that from CPB staff. It would be an understatement to say that attacks on all aspects of the Jones Act – most recently from U.S. Senator John McCain – have become more numerous and robust in their application. Look for this to continue.

Transportation Worker Identification Credential (TWIC): TWIC was reformed in 2012. However, implementing regulations are incomplete. AWO reports that the Coast Guard is developing regulations for electronic TWIC readers to be installed on certain vessels and at certain marine transportation facilities. AWO writes: the “card readers add no security value on vessels with small crews, such as towing vessels.” AWO supports the Coast Guard’s proposal not to require TWIC readers on vessels with 14 crewmembers or less.

Air Emissions & Miscellaneous: This is the basic, but expensive, stuff: air emissions from marine engines, including emissions that affect air quality compliance (ozone, particulates) in metropolitan areas and emissions that can present local health impacts in proximate neighborhoods. The Port of New York/New Jersey’s Ed Kelly is concerned about new or revised regulations addressing marine mammals. He also says that animal avoidance and safety present difficult operational issues for vessels. Kelly hopes that a technological solution is on the horizon, one that advises captains that animals are close and that proceeding requires caution.

Dredging / Infrastructure: Ed Kelly said that federal officials are “under pressure” to shift resources from maintaining navigational channels, and that some could be abandoned. Kelly is concerned about “competing demands for rivers,” that new demands from energy projects, for example, may restrict dredging and channel development. This is being played out now with the proposal in New York to allow a cable to be laid length-wise in the Hudson River from Albany to New York City. This could be a one-time allowance, or it could set a precedent.

Offshore Energy: In general, Kelly and Allegretti are supportive of offshore energy development. But that’s not a blanket endorsement. Kelly referred to the Gulf of Mexico as a “slalom course” for captains because of energy infrastructure. Allegretti says navigation channels have to be considered and protected: “we can’t lose them,” he insists, adding that there is no magic wand with this issue, that each project will need thorough attention and analysis.

Anchorages & Safety Zones: The Coast Guard’s 2016 proposal for new anchorage zones on the Hudson River is the poster-child case for this set of issues. The USCG received over 10,200 comment letters, 94% opposed the new zones. Ed Kelly views this huge push-back on what is largely a safety and security issue to be “problematic for future work.” Next steps include a PAWSA – a “ports and waterways safety assessment.” No progress since the Coast Guard suspended future rulemaking decisions regarding additional anchorages at the end of June. Watch for PAWSA news sometime this fall.

Local Zoning/Land Use: Not a federal issue but Ports in major metro areas are frequently the last large tracts of contiguous land with property that may be undeveloped or seemingly underutilized. Ed Kelly said that Port real estate is under pressure from competitive urban demands: “New condos, river view.” For Kelly, those pricey offerings threaten the kind of footprint that Ports require to operate and thrive.

State Activities: AWO has a significant list of issues in which states – Massachusetts, California and/or Washington to name just a few – are assuming dominant roles over federal authority. Discharge rules are one example. “There are too many standards,” Allegretti says. “Mariners are unknowingly out of compliance somewhere, at some point.” AWO asserts that the Coast Guard has primary authority for waterways oversight. A common set of regulations, he insists, is preferable to a patch-work of state regulations.

Looking Ahead

No one said it was going to be easy. That said, some of these issues – especially for our domestic workboat audience stretching over multiple sectors – are nothing short of daunting. And, to be sure, for every bullet point shown above, there is another issue lurking just behind it, awaiting the opportunity to emerge. Those readers in the passenger vessel business know exactly what I’m talking about. Stay tuned right here for future updates.